A Poll. Who is the false profit?

[ks.234]

These two statements can’t both be right, which one is false?

“Anything we can actually do we can afford.”​

John Maynard Keynes

​

…..or….

“The state has no source of money, other than the money people earn themselves. If the state wishes to spend more it can only do so by borrowing your savings, or by taxing you more. And it’s no good thinking that someone else will pay. That someone else is you.”

“There is no such thing as public money. There is only taxpayers’ money.”​

Margaret Thatcher​

 

[ks.234]

Point of order, sir, it's Margaret, not Margret. Not that I'm that bothered about getting her name right.

I do like your play on words over 'profit' though.

Thank you, corrected. Can’t change it in the poll tho

 

[Enfield boy]

A relevant point may be that JMK's statement may imply a sort of "closed circuit" in that anything "we" can do but not if it puts us in hock to (say) China. Ultimately they are holding debt that they may want to take out of "our" system.

Nothing wrong with the spelling, I'd far rather think of (Ann) Margret than the Iron Bi...

 

[ks.234]

A relevant point may be that JMK's statement may imply a sort of "closed circuit" in that anything "we" can do but not if it puts us in hock to (say) China. Ultimately they are holding debt that they may want to take out of "our" system.

Nothing wrong with the spelling, I'd far rather think of (Ann) Margret than the Iron Bi...

Yes, but it is not the debt that China holds that is a problem, it is the debt that China holds in a currency that is not ours that is the problem.

And who was it that agreed to owing China a debt in a foreign currency? George Osborne.
https://www.theguardian.com/comment...orge-osborne-china-chancellor-britain-economy

 

[Enfield boy]

Even owing it in our own currency is a problem if they want to cash it in.
We have to give them value in some way whether in goods, services or another currency. If we don't make enough we have to buy it and the vendor has to trust our currency.

 

[Seeker_UK]

A relevant point may be that JMK's statement may imply a sort of "closed circuit" in that anything "we" can do but not if it puts us in hock to (say) China. Ultimately they are holding debt that they may want to take out of "our" system..

AIUI, this is the key part of Keyne's statement - if we are self-sufficient / contained with regards to the resource, we can do it without constraint. The problem is that today, a lot of that resource is not available w/out some kind of trade with entities outside of the UK (eg Marshall Plan). Therefore we are constrained.

Stripped of that context, Keynes' statement may have been true in 1942 but is not true today where the UK has to trade with the World because we no longer have an empire / commonwealth-sized resource pool to draw from (and quite right too).

Thatcher's is b*llocks and an excuse to shrink the state / throw us to the mercy of the free market.

 

[Enfield boy]

That seems logical, it's been a long time since I read any of JMK's work and I recall it being very "theoretical" and probably simplified for "A"level students. Fascinating though and probably very relevant insofar as the money/debt can be kept in the UK so a huge balance of payments deficit is a problem.

 

[ks.234]

That seems logical, it's been a long time since I read any of JMK's work and I recall it being very "theoretical" and probably simplified for "A"level students. Fascinating though and probably very relevant insofar as the money/debt can be kept in the UK so a huge balance of payments deficit is a problem.

What’s the problem?

 

[ks.234]

AIUI, this is the key part of Keyne's statement - if we are self-sufficient / contained with regards to the resource, we can do it without constraint. The problem is that today, a lot of that resource is not available w/out some kind of trade with entities outside of the UK (eg Marshall Plan). Therefore we are constrained.

Stripped of that context, Keynes' statement may have been true in 1942 but is not true today where the UK has to trade with the World because we no longer have an empire / commonwealth-sized resource pool to draw from (and quite right too).

Thatcher's is b*llocks and an excuse to shrink the state / throw us to the mercy of the free market.

We have need of a great deal of resources in which we are self sufficient, millions of unemployed for a start.

 

[Enfield boy]

It means we owe money/goods/services outside of the system. If it goes unabated it could result in the debt owed overseas being worth more than we can supply. At that point creditors may be unwilling to accept £ as payment. In demanding repayment they could precipitate a crisis.

 

[ks.234]

Even owing it in our own currency is a problem if they want to cash it in.
.

Our government has a hand on the printing press, it can crank out as man £’s as it likes. It is this knowledge that gives government treasuries their name, they’re bought in the knowledge that payment of the agreed amount at the agreed time is guaranteed

 

[Enfield boy]

We have need of a great deal of resources in which we are self sufficient, millions of unemployed for a start.

And many that we can never be. Also it has been policy for 50 years to destroy local industry and outsource. Damage could be repaired but that would require huge investment something that right wing dogma is set against unless by Corporations who are now multinational and can be seen as competitors to the nation states in that debt to them could create similar problems as debt to other states.

 

[ks.234]

It means we owe money/goods/services outside of the system. If it goes unabated it could result in the debt owed overseas being worth more than we can supply. At that point creditors may be unwilling to accept £ as payment. In demanding repayment they could precipitate a crisis.

If we buy steel from China, isn’t that debt resolved when we pay for it?

 

[Yank]

Running large deficits forever, the economy essentially becomes fiat money, and I'm fine with that.

 

[ks.234]

And many that we can never be. Also it has been policy for 50 years to destroy local industry and outsource. Damage could be repaired but that would require huge investment something that right wing dogma is set against unless by Corporations who are now multinational and can be seen as competitors to the nation states in that debt to them could create similar problems as debt to other states.

If we take the big issues facing us today, issues that we have not addressing very well for the last half century, those issues would include, to mention three in no particular order, health, education and climate change. Surely we are resource rich in the first 2 and on climate change have a labour pool that could, with training (another domestically available resource) be deployed installing solar panels, heat pumps, cycle tracks, broadband and a host of measures that could tackle climate change. If we also need to import raw materials and know how, then what is stopping is importing raw materials and know how?

Totally agree that it is right wing dogma that government spending is deemed morally wrong and restrained as much as is politically possible. We need to address that dogma.

That dogma rests on notions of debt. We seem programmed to accept that we owe something to those above us.

But when it comes to improving society, isn’t improving health, education and the climate a benefit to everyone? Why should it be the taxpayer that is presented with a bill for improvements to society? Why can’t the government dip into it’s own infinitely deep pockets?

 

[Sue Pertwee-Tyr]

Indeed. If the spending results in an asset, such as infrastructure or improvements to services, then there’s a positive entry on the other side of the ‘balance sheet’ surely? It’s not simply a debt.

 

[ks.234]

Indeed. If the spending results in an asset, such as infrastructure or improvements to services, then there’s a positive entry on the other side of the ‘balance sheet’ surely? It’s not simply a debt.

Yes, we need to start balancing the economy, not just numbers on a spreadsheet

 

[russel]

Indeed. If the spending results in an asset, such as infrastructure or improvements to services, then there’s a positive entry on the other side of the ‘balance sheet’ surely? It’s not simply a debt.

Investing for the future is not what followers of the blessed Margaret want, it’s profits now.

 

[stevec67]

It means we owe money/goods/services outside of the system. If it goes unabated it could result in the debt owed overseas being worth more than we can supply. At that point creditors may be unwilling to accept £ as payment. In demanding repayment they could precipitate a crisis.

Sorry, but this is kitchen sink economics. Unless the economy is totally ruined, and this takes more than a few loans being called in, it can't happen. It's like suggesting that Unilever plc could be ruined if all its loans were called in at once. We all know that Unilever can't pay back all its loans any more than a first time house buyer can pay back the mortgage, but it doesn't matter because every investor in the world will Unilever money.

 

[Seeker_UK]

We have need of a great deal of resources in which we are self sufficient, millions of unemployed for a start.

Unless you're suggesting rendering them down or turning them into road surfaces, you might find their utility a bit limited.

[edit]

Human resource (when suitably qualified and experienced) is a powerful thing and something we don't make enough of. However, at some point you're going to need raw materials. Want more nuclear power - you'll need to buy the ore from Australia nowadays. More steel? you'll be needing to pay Australia, S Africa and where we do have resources, like coal for steel coking, everyone spits their dummies out.